Agreement – Roadworks – Claimant paying contribution towards improvements to junction to be carried out by defendant council – Contribution repayable if works not commenced by given date – Whether agreement requiring that defendants also in position at that date to complete works without interruption – Claimant seeking return of contribution – Claim dismissed
The claimant entered into an agreement with the defendant council, under section 52 of the Town and Country Planning Act 1990, in order to address traffic problems in connection with a planning permission for development on its land. Under the agreement, the claimant was to pay £150,000 to the defendants as a contribution towards the cost of improvement works to a road junction that the defendants would carry out by constructing a roundabout or some other appropriate scheme. Clause 16.5 of the agreement provided that if the improvements were not commenced by 31 December 1994, the defendants would be obliged to repay the £150,000 to the claimant. By clause 2.4 of the fourth schedule, the defendants undertook to use their best endeavours to complete the works with all due diligence.
They proposed to carry out the improvements as part of a wider road scheme and the necessary planning permissions and compulsory purchase orders were obtained. In October 1994, the defendants decided to hive off part of the works, including the construction of a roundabout at the junction, as phase 1. They placed various orders relating to the project – for the diversion of utilities by statutory undertakers, the advance earthworks and a new drainage run to drain surface water – with a view to starting work in December 1994, although the precise route and design of the drainage outfall remained to be determined.
In 1995, the works stopped owing to delays relating to the drainage outfall, which had arisen after the company over whose land it was to run went into receivership. The outfall was eventually built on the claimant’s land. The works were finally completed between late 1996 and 1997.
The claimant argued that the defendants had failed to comply with their obligation under clause 16.5 and were consequently obliged to repay the £150,000. It contended that the defendants had been obliged not only to begin the improvement works by 31 December 1994 but also to be in a position at that time to complete them without interruption.
Held: The claim was dismissed.
The defendants’ obligations with regard to the improvements were: (i) to determine prior to 31 December 1994, what improvement works would be carried out and to start carrying out those improvements; and (ii) to use their best endeavours to complete the works with due diligence. The two obligations were separate and there was no reason to impose upon the defendants, at the time of commencement, potentially onerous conditions regarding completion that were not expressly set out in the agreement. To comply with clause 16.5, the defendants had to begin some physical works by the relevant date that were more than de minimis. On the evidence, by December 1994, the defendants had determined the nature and scope of the improvement works and had initiated them by carrying out earthworks and drainage works on the junction site. Those works were not de minimis when compared with the overall cost of the roundabout works. The defendants had therefore complied with clause 16.5.
Later events did not alter that conclusion. Although further works had been delayed for almost two years, that did not mean that the works of 1994 and early 1995 had been carried out solely to avoid repaying the £150,000 and that they were not a genuine commencement. The delay had been caused by the need to resolve the problem of the drainage outfall. The defendants had genuinely started the works in December 1994 and had used their best endeavours thereafter to complete them.
Colin Challenger (instructed by Thomas Cooper & Stibbard) appeared for the claimant.
Sally Dobson, barrister
